Bus Market: Public Transportation Investments, Fleet Modernization & Growth Ahead

According to IMARC Group's latest research publication, The global bus market size was valued at USD 53.42 Billion in 2025. Looking forward, IMARC Group estimates the market to reach USD 91.26 Billion by 2034, exhibiting a CAGR of 5.82% from 2026-2034.

How AI is Reshaping the Future of Bus Market

• Intelligent Fleet Management and Route Optimization: AI algorithms analyze real-time traffic, weather, and ridership data to dynamically optimize routes, reducing fuel consumption by up to 30%. These systems enable predictive decision-making, minimizing delays while improving on-time performance and passenger satisfaction across transit networks.
• Predictive Maintenance and Downtime Prevention: Machine learning models monitor vehicle sensors to predict component failures before breakdowns occur. Companies implementing AI-driven maintenance report reductions in unplanned downtime and optimized maintenance schedules, lowering operational costs while extending vehicle lifespan and ensuring fleet reliability.
• Advanced Driver Safety Monitoring Systems: AI-powered computer vision analyzes driver behavior in real-time, detecting unsafe actions like distracted driving or harsh braking. Leading operators have achieved up to 89% accident reductions and 92% decreases in high-risk behaviors using these safety technologies.

Explore Updated 2026 Market Trends & Analysis

Bus Industry Overview:

Government electrification programs are fundamentally transforming the bus sector with substantial funding commitments. The EPA's Clean School Bus Program allocated USD 5 billion over five years, funding 8,500+ electric school buses across 1,200 school districts. New York's School Bus Incentive Program provides USD 500 million for electric buses and charging infrastructure. The Federal Transit Administration announced USD 1.1 billion in competitive grants for low and no-emission buses, while the U.S. Department of Transportation unveiled USD 2 billion in infrastructure funding for over 165 public transport operators, accelerating fleet modernization nationwide.

Bus Market Trends & Drivers

Rapid electric bus adoption is reshaping public transportation as cities prioritize sustainability and emission reduction. Transit agencies are transitioning to zero-emission fleets supported by federal and state incentives, with tax credits saving districts up to USD 40,000 per electric bus before recent program adjustments. In November, Daimler Buses launched the Mercedes eIntouro with LFP batteries and fuel-cell variants at eMobility Days, strengthening its electrification roadmap. VinFast introduced EB 8 and EB 12 electric models at Busworld Europe, with the 12-meter EB 12 certified under UNECE regulations and ready for European orders. Battery technology improvements and expanding charging infrastructure are making electric buses increasingly viable for urban and intercity operations.

Smart city initiatives and digital transformation are driving unprecedented technology integration in bus operations. Fleet management systems now incorporate AI-based analytics, real-time GPS tracking, and IoT sensors to enhance efficiency and passenger experience. The electric school bus fleet management market surged from USD 1.01 billion to USD 1.21 billion, with projections showing continued expansion driven by AI integration and vehicle-to-grid technology. In September, Zonar acquired ez enRoute to enhance electric and connected school bus fleet management through advanced IoT and AI-driven solutions. The automotive AI market is projected to reach USD 405.3 billion, reflecting growing investment in intelligent transportation systems, autonomous features, and connected vehicle platforms.

Public transportation infrastructure expansion and urbanization are creating massive demand for modern bus fleets. India's Interim Budget allocated USD 33.6 billion to the Ministry of Road Transport and Highways, demonstrating strong infrastructure commitment. Rajasthan State Road Transport Corporation added 128 new blue line buses across 23 depots, significantly enhancing rural-urban connectivity. JBM ECOLIFE Mobility secured USD 100 million in long-term funding from the International Financial Corporation to deploy air-conditioned electric buses across Maharashtra, Assam, and Gujarat. Urban populations continue growing, with Middle East and Africa urbanization expected to reach 97.6% by specific projections, while cities like Riyadh anticipate populations of 8.2 million, necessitating robust public transit systems to manage congestion and mobility demands.

Leading Companies Operating in the Global Bus Industry:

• AB Volvo
• Anhui Ankai Automobile Co. Ltd.
• Ashok Leyland (Hinduja Group)
• BYD Company Ltd.
• IVECO S.p.A
• Mercedes-Benz Group AG
• NFI Group
• Solaris Bus & Coach sp. z o.o. (Construcciones y Auxiliar de Ferrocarriles S.A.)
• Suzhou Eagle Electric Vehicle Manufacturing Co. Ltd
• Tata Motors Limited
• Traton Group (Volkswagen AG)
• Xiamen King Long United Automotive Industry Co. Ltd.
• Zhengzhou Yutong Bus Co. Ltd.

Bus Market Report Segmentation:

By Type:

• Single Deck
• Double Deck

Single deck represents the largest segment with 65% market share, driven by widespread use in urban and suburban public transportation due to compact size, fuel efficiency, and affordability.

By Fuel Type:

• Diesel
• Electric and Hybrid
• Others

Diesel holds 70% market share owing to established fueling infrastructure, long operational range, and cost-effectiveness, particularly in regions with limited charging infrastructure.

By Seat Capacity:

• 15-30 Seats
• 31-50 Seats
• More than 50 Seats

31-50 seats accounts for 55% market share, offering the optimal balance of passenger capacity and operational versatility for urban transit, intercity travel, and corporate shuttles.

By Application:

• Transit Bus
• Intercity/Coaches
• Others

Transit bus dominates with 60% market share due to increasing government investment in public transit systems to facilitate urban mobility and reduce traffic congestion.

Regional Insights:

• North America (United States, Canada)
• Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, Others)
• Europe (Germany, France, United Kingdom, Italy, Spain, Russia, Others)
• Latin America (Brazil, Mexico, Others)
• Middle East and Africa

Asia Pacific exhibits clear dominance with 40% market share, driven by rapid urbanization, massive government spending on public infrastructure, and robust local manufacturing capacity.

Recent News and Developments in Bus Market

• October 2025: Beginning in 2026, Daimler Buses will deploy its own public charging stations for electric buses and coaches, targeting heavily trafficked tourist spots in Europe—like bus parking areas at amusement parks or in urban centers. The company intends to promote the growth of high-performance charging infrastructure beyond highways in the upcoming years. This will allow electric buses and coaches to reach even distant travel locations in the future – at present, this is feasible only in a few limited instances. The project will start with a pilot scheme initiated by the regional energy and climate protection agency NRW.Energy4Climate in collaboration with the City of Cologne: Next year, four public fast-charging stations for electric buses and coaches are planned to be set up close to the city center.
• October 2025: VinFast has introduced two new electric bus models at Busworld Europe 2025. The EB 8 and EB 12 signify the firm's debut in the European public transport market. The 12-metre EB 12 has received certification under UNECE and CE regulations and is now ready for order in Europe. The smaller 8-meter EB 8 is poised to follow. Both models will come with an unlimited mileage warranty that spans five years for the vehicle and extends up to eight years for the high-voltage battery and corrosion protection.
• October 2025: Rajasthan Chief Minister Bhajanlal Sharma inaugurated 128 new blue line buses of the Rajasthan State Road Transport Corporation (RSRTC) on Sunday (5 October), signaling a significant enhancement in the state's public transportation system. The new blue line buses have been allocated to 23 depots throughout Rajasthan, with the project mainly focused on enhancing connections between Jaipur and rural areas.
• September 2025: JBM ECOLIFE Mobility has obtained USD 100 Million in INR equivalent long-term funding from the International Financial Corporation (IFC). The funding will support the rollout of new, air-conditioned electric buses in urban areas of Maharashtra, Assam, and Gujarat.
• November 2024: Daimler Buses rolled out the near-production Mercedes eIntouro powered by LFP batteries, eCitaro with NMC4 battery, and a fuel-cell bus in H2-only mode at eMobility Days, further strengthening its e-mobility timeline.

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